People & Money

$89 Billion Moved Illegally Out of Nigeria in 18 Years – UN

Between 1996 and 2014, Nigeria recorded a total of $89 billion in illicit financial flows [IFF]. This is according to the Economic Development in Africa Report 2020 recently released by the United Nations Conference on Trade and Development [UNCTAD].

Nigeria currently accounts for an estimated 46% of the capital flight on the continent and 80% of IFF in West Africa alone. Estimated capital flight in the country peaked in 2013 at $45.5 billion. In 2018, 80% of the suspicious transactions detected by the Financial Intelligence Unit were related to money laundering.

Also Read: Illicit Financial Flow From Africa Around $90 billion – UN Study

The problem is not limited to the shores of Nigeria. According to the UNCTAD report, South Africa witnessed a capital flight of $198 billion between 1970 and 2015; Cote d’Ivoire recorded illicit financial flows of $32 billion within the same period; Angola suffered a capital flight of $60 billion between 1986 and 2015. Capital flight on the continent between 2000 and 2015 was $836 billion.

Half of the illicit outflows in Africa is done through trade mispricing or under-invoicing i.e. stating the value of a good or service on an invoice as less than the price actually paid. A considerable factor in IFF on the continent is the corruption related to natural resources. Over the past decade, IFFs linked to the export of primary extractive resources such as oil, gas and timbre, accumulated to at least $278 billion. At 77%, gold is the most under-invoiced export on the continent.

The report also noted some progress in recovering looted treasury. The StAR initiative, launched in 2007 as a joint project between the World Bank and the United Nations Office on Drugs and Crime [UNODC], has overseen the return of stolen capital to certain countries in Africa.

Of the 17 African countries with an ongoing or complete case of illicit funds recovery, Nigeria remains the most active country with $1.48 billion returned as at January 2020, making up for 96.4% of the figure in all of Africa. Kenya lags behind in second place with just $17 million. The top three sources of recovered assets are Switzerland, the United Kingdom and the United States.

Also Read: Nigeria at 60: Buhari Explains Why Nigeria’s “low” Petrol Price is Unsustainable

However, the money recovered in Africa through the StAR initiative remains insignificant; it
only amounts to a meager 0.5% of the total capital flight on record.

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